The Toro Company (NYSE:TTC) shares traded higher Thursday after the company reported second-quarter results that topped Wall Street estimates and raised its full-year outlook.

Strong Quarter Driven By Demand And Margin Expansion

The lawn care and outdoor equipment maker reported second-quarter sales of $1.43 billion, exceeding analyst estimates of $1.39 billion. Revenue increased 8.1% from a year earlier, including 5.7% organic growth, as demand remained strong across key end markets.

Adjusted earnings rose 13% year over year to $1.60 per share, beating the consensus estimate of $1.50.

The quarter marked Toro’s second consecutive quarter of double-digit earnings growth, supported by higher sales and improving profitability.

Adjusted operating margin expanded 70 basis points to 14.4%, helped by cost-saving initiatives, pricing actions and productivity improvements.

Cash Flow And Segment Results Remain Strong

Free cash flow climbed to $266 million, up $181 million from the prior year. The increase was driven by lower inventory levels and improved working capital management.

Free cash flow conversion reached 125%.

During the first half of fiscal 2026, Toro returned $361 million to shareholders through dividends and share repurchases.

In the Professional segment, sales increased 9.1% year over year, or 6% on an organic basis. Growth was led by the golf and grounds, landscape contracting, and underground and specialty construction businesses.

Residential segment sales rose 4.1% on an organic basis, benefiting from improved demand and easier comparisons with the prior year.

Professional segment operating margin was 20.3%, while Residential segment margin improved 440 basis points to 9.8%.

Chairman and CEO Rick Olson said the company’s Ditch Witch underground business delivered low double-digit revenue growth during the quarter, driven by very strong demand and increased production capacity.

He highlighted sustained demand for fiber, broadband, power utility and data center infrastructure projects, noting that demand remains strong across the product lineup.

Toro Raises Full-Year Guidance

Toro raised its fiscal 2026 adjusted earnings forecast to a range of $4.50 to $4.62 per share, up from its previous outlook of $4.40 to $4.60. Analysts were expecting $4.55 per share.

The company also increased its sales outlook to a range of $4.69 billion to $4.80 billion, compared with its prior forecast of $4.65 billion to $4.80 billion. Wall Street’s consensus estimate stood at $4.74 billion.

Management now expects Professional segment sales to grow 5% to 7% this year, while Residential segment sales are projected to remain broadly flat.

For the third quarter, Toro expects mid-single-digit total sales growth, with Professional segment sales increasing by a mid-single-digit percentage and Residential sales rising by a low-single-digit percentage.

The company continues to target high-single-digit earnings growth and free cash flow conversion of at least 120% for fiscal 2026.

TTC Price Action: Toro shares were up 1.79% at $92.57 at the time of publication on Thursday, according to Benzinga Pro data.

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